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Why China Grows So Fast

By

Michael Spence

Updated Jan. 23, 2007 12:01 a.m. ET

Sustained high growth in developing economies is a recent, post-World War II phenomenon. Using GDP figures, I take "high" to mean above 7% and "sustained" to mean over 25 years or more. These cutoffs are arbitrary, but a similar picture emerges with variants. Growth at these rates produces very substantial changes in incomes and wealth: Income doubles every decade at 7%.

There are 11 such cases of sustained high growth, and eight are in Asia. These are Botswana, China, Hong Kong, Indonesia, Korea, Malaysia,...